Dole-ing Out a Windfall? : San Diego Likely to See Modest Profit from GOP

San Diego’s windfall from the Republican National Convention will probably add up to less than the $30 million hyped by local politicians but more than the “wash” predicted by pundits who say convention bonanzas never live up to their billing.

But will it be worth the $13 million the city is shelling out in cash and in-kind services? And will the image boost that the city is hoping for turn to stigma if organizational problems--or worse--plague the San Diego event as they did the Olympics in Atlanta?

There is no question that the 30,000 delegates, guests and media members, descending on San Diego for the five-day extravaganza that begins Monday, will be good for San Diego’s hospitality, transportation and tourism industries. Catering, event planning, transportation and boat charter firms say business is brisk, and hotels within a mile of the Convention Center are sold out.

But political conventions are not huge moneymakers compared with other confabs. Delegates, media members and all their hangers-on typically stick close to the convention site, venturing out to eat at the hundreds of hosted affairs put on by lobbyists, corporations and other interest groups. That deprives restaurants and other tourist attractions of the money that a typical leisure traveler would spend.

Yes, companies such as AT&T;, which is supplying communications services to the GOP delegates, keep local vendors busy by spending on public relations, printing, office supplies, photography and so on. (AT&T; ordered a multitude of signs from a Carlsbad firm, Blazing Banners.) But so might virtually any service supplier of a major convention coming through town.

The GOP convention is not even of record size for San Diego. In the last year alone, an Alcoholics Anonymous convention with 60,000 delegates and a group of Baptists numbering 30,000 were as large or larger. “This will rank in the top 10 of San Diego conventions,” one local tourism official said last week.

Moreover, the meeting occurs during San Diego’s peak August tourist season, when hotels typically run at maximum occupancy and charge peak rates, while tourism firms are going full tilt. So the boost in visitor spending will be minimal, said Bruce Baltin, senior vice president of PKF Consulting in Los Angeles.

Hotels say bookings for the “shoulders” of the convention--just before and after the meeting--have been unusually soft.

“I’m a guarded optimist,” said Bert James, general manager of the San Diego Hilton Beach and Tennis Resort. “It will net out to about what we expected normally.”

Ultimately, city officials say, the real benefit will be an intangible one from the international exposure San Diego receives through media coverage and the positive word of mouth from corporate executives who are coming to rub shoulders with politicians. The city is courting those execs with a “CEO Outreach” program designed to lure future corporate relocations or meetings.

“We get the opportunity over the next week to show American captains of industry how business-friendly a city San Diego is, with the hope they will want to locate their business here,” said Steve Cushman, owner of several San Diego auto dealerships and head of the convention’s transportation committee.

But the “halo effect” of national and international prestige the city is seeking could turn ugly if things go wrong with a security breach or organizational problems, or if the convention is deemed a failure.

“They’re already saying that the hall is too small, the ceiling is too low, that the balloon drop is going to take a nanosecond,” one observer said.

“The afterglow of a good convention lasts two months. The effects of a bad one last 20 years. Look at Chicago,” said UC San Diego political science professor Steve Erie, referring to the bloody clashes between police and protesters at the 1968 Democratic convention.

The problem with an event’s residual benefits is they are not easily quantified or confirmed. Houston has seen no direct benefit from hosting the 1992 Republican National Convention; annual hotel room nights sold are running at about the same rate as four years ago, said Jerry Morrison, president of Morrison & Co., a San Diego hotel consulting firm.

Plus, a program similar to the CEO Outreach program launched by Houston leaders during that convention has had no discernible results, and Albert Ballinger, data manager at the Center for Public Policy at the University of Houston, said such programs are unrealistic.

“Are you going to tell me that these titans are so stupid they don’t already realize the attraction of San Diego in and of itself, that a sudden trip there is going to cause them to think: ‘Hey, I’ll make my widgets here. Give me my cellular and I just won’t go back,’ ” Ballinger said.

One lasting effect for Houston was “negative because of the awful speech that Pat Buchanan made, which is always referred to as having been made at the Houston convention,” Ballinger said, referring to the criticism from women and gay rights groups generated by Buchanan’s talk.

The San Diego companies that seem to be enjoying the most business from the convention are those that launched marketing campaigns a year ago to sell their services to major corporations that form an integral part of the convention scene. By contrast, the companies expressing disappointment are those that expected business to fall into their laps.

Lisa Richards, owner of Festivities Catering of San Diego, expects to serve 8,000 meals during the convention at 120 events over five days, a business boost for which she hired 200 extra part-time workers. But the “once-in-a-lifetime” business volume is a result of a marketing program she began a year ago with expensive mailings to Fortune 500 meeting planners.

Presidential Limousine of San Diego has booked only half its fleet so far for the convention week, said Chief Financial Officer Robert Tatra. “We thought the Republican National Committee, with whom we had talked, would be the main contact for business, and it hasn’t panned out that way,” he said.

Also, delegates seem to want sedans more than limos this year, perhaps to avoid the appearance of squandering shareholder or contributor funds. “They don’t want to stick out,” Tatra said.